When is enough enough?
One of the biggest challenges in life is knowing when to stop. In general, when something is going well and feeling good – we want more of it. There is this natural desire to expand the good things in life and extrapolate from where we are. I once saw a funny video on France Inter (that I cannot find) of a comedian explaining that the key element to having a good time at a party is to know when to stop drinking or consuming drugs. Far too often we start having a drink and then feel that lovely buzz, our brain – simple creature that it is – then tells our arms and mouth to have another and another and another and then it does not feel so good. The key element to make the party and the alcohol a success is to have the ability to say – stop, we are good here!
Our actions with money and work follow a similar pattern. We start making some money and buying pleasurable things and experiences. Our brain says – wow, that was great, lets work some more and spend some more. This puts us on a treadmill of earn and spend that frankly has no limit. Knowing how to tune that treadmill for the ideal pace is the crux of the challenge. We have all come across headlines of that 30 year old who retired after they saved every penny, they live in a micro house and only eat rice – but this extreme example of frugality is hardly applicable to the average person (let alone family) and abstinence of human pleasure is unlikely to inspire vast majority of us mortals. It is a bit like saying, “work out 8 hours a day and you can get to the Olympics” – not really applicable to the average Joe (not me at least). At the other extreme of this frugality are those who earn a sizable income, but then spend it all. I have seen and heard of many people who have apparently luxurious life styles – nice cars, fancy restaurants, big houses, designer clothes – but live on the precipice of bankruptcy. Like the fable of Goldilocks, the trick is to find the bowl of porridge that is not too hot and not too cold, but just right. This is much harder than it seems.
Good things have powerful effects on the body. The release of adrenaline during extreme activities or the release of endorphins during pleasurable experiences drive us to want to reproduce and augment those feelings. And, in some sense, there is a catch-22 in certain activities. To earn a lot of money, you often need to love money. When you love money you always want more. Similarly, in extreme sports – you need to love the thrill of jumping off a cliff or flying through the air to start in the first place and once you are on the bandwagon of extreme sports it can be as challenging to get off as if you were taking hard drugs. In the excellent movie, Lost World of Z, which is based on a true story, British explorer Percy Fawcett travels to South America in search of the source of a river and eventually a lost city. His first trip is a roaring success with archaeological discoveries and the safe return of his crew. With his newfound fame, sense of confidence and desire to go deeper into the jungle he leaves England with a new crew in search of a lost city. The second trip does go deeper into the jungle, but they do not find the lost city and the trip is more or less a disaster. At this point Percy Fawcett could settle into a comfortable retirement and spend time with his family. Instead, he decides to embark on another trip with his teenage son to try and find this lost city of Z. (Spoiler alert) Both Percy and his son disappear on this trip and never return. Simply put, Percy did not know when enough was enough – but maybe that was the point of the story.
Sports athletes who play past their prime, politicians who overstay their welcome and celebrities who fail to recede from the spotlight are all examples of our human foible of addiction. Power, money, fame are as powerful as any drug. The most extreme cases of these excesses are the tragic cases of suicide and mental breakdowns. It is easy to point to these famous people and say, “I am not like that” and indeed, most of us do not have substantial power, money or fame. However, we all have some level of power, money and fame and it is often more than we actually need or want. I recall an aging family man who had accumulated a beautiful house, a cottage, cars, boats and other man-toys. Despite his high income and and good health, he found himself spending most of his time making bill payments and taking care of his possessions. When he visited his university aged son in his student apartment, he marvelled at the simplicity and at the happiness his son exhibited. Of course his student’s detachment from material possessions was largely driven by his limited means, but the impact of his limited responsibilities naturally had a very liberating effect on his son. To a certain extent, movies like American Beauty hit on this theme, but I personally love The Onion article, “Executive Quits Fast Track To Spend More Time With Possessions” – it makes the obvious omission of his three children.
I suppose the the ultimate challenge here is not to know when to stop, that is very challenging, but to know what success looks like. The task at hand is to determine what you want. To live fully, we must be explicit in our desires with both ourselves and those in our lives. Creating clarity in our aims, plans and desired ultimate outcomes allows us to set boundaries. Lives and relationships that fail are often ones where people did not take the time to outline success and were afraid to discuss their limits. Sometimes that fear of discussion is due to social pressure or anxiety or insecurities that we have accumulate over time, but there is no good outcome when you keep your true desires hidden from others. If you do not create clarity of your desired life, others will impose theirs on you and your life will become theirs – if only partially. Parents do this to children all the time, families do this to their members and bosses do this to staff on a regular basis.
Numerous studies show that people have no increased happiness past a certain income level (though a new study casts some doubt on that). Well being and happiness are challenging topic, which this blog post certainly cannot adequately address. Regardless of the money required to feel good in life, it is clear that our society generally heaps praise and admiration on those who reach the greatest heights in wealth, fame, or sport. This culture of venerating excess is somewhat linked to the marketing industry and our consumer economy, but even before the modern era human society placed disproportionate fame on those who went to the extremes of the human condition. Religions venerated martyrs, armies promoted heroic battle, kings promoted chivalry and beauty (especially female) was always top of mind in all societies. Humans have an innate desire to always want more and that is perhaps the greatest driving force for the development of society. It has pushed us to invent, create and build and it has led us to attain levels of security and comfort that no one could have anticipated. Having attained a certain level of comfort for many, we must focus on improving comfort for those who do not have it and thinking about a broader challenge of setting the stage for the next evolution of civilization. Today, with our environmental challenges and our mental health crisis it is time for us to spend more time on helping people understand when enough is enough.Published on August 12, 2021
On Housing – Land (Part 1 of many)
There is a story that the Talmudic sage Rabbi Hillel was confronted by a person who wished to convert to Judaism. Asked how he could go about such a religious transformation, the Rabbi responded, “”What is hateful to you, do not do to your neighbour. That is the whole Torah; the rest is the explanation of this—go and study it!”. Put another way, he said that do unto others what you would have them do unto you, the rest is commentary. In many ways, housing is a fairly similar in both its simplicity and its complexity. I think that the current housing issues can ultimately boil down to “housing prices are supply and demand, everything else is commentary”.
While the reality may indeed be that the housing market determines the housing prices, the truth is that many cities and countries are paying a steep price for exorbitant housing prices that are driven by market failures. In Canada, where this crisis is particularly bad, over 3.3. million families are contributing over 30% of their revenues to housing. Historically low interest rates have allowed many people to get into the housing market and have kept payments under control. However, it is well understood by homeowners, government and policy makers that increased borrowing costs would likely drive many families to the brink. One argument homeowners provide for spending so much money on housing is that their home is an investment. This is patently false. Any home is a physical thing and as such, it degrades. Even with regular maintenance and upkeep, a physical object will always be in worse shape than when it is originally built. Just think of cars – how many cars appreciate in value over time? So, if houses themselves are not appreciating in value – what is? Land. Land in desirable locations with the ability to have a house (physically and legally) is the element of this equation that is continuing to appreciate. Of course, housing without land is not possible so the two are tightly interlinked, but it is ultimately the land that is the constraining factor. We cannot make more land and the right to build has come under increasing regulation which reduces the ability of people, companies and organizations to build cost effectively. There are many solutions to this problem, but the real problem is the collective will power for us to change.
On the surface, it is easy to chalk up high housing prices to a failure to build new homes faster than population growth and the degradation of the housing stock. New construction shortages are well documented (Scotiabank report). These shortages are due to a number of factors – land availability, labour availability, capital availability, construction material and regulatory hurdles. On the question of land restrictions, which are substantial, it should be noted that cities like Toronto, Vancouver, New York, San Francisco, Shanghai, Paris, and others all have physical limitations (oceans for New York, Shanghai, San Francisco, and Vancouver or a big Lake for Toronto) or political limitations (intra-muros for Paris). Cities with less physical limitations – such as Montreal, Phoenix, Dallas, Austin and many others can expand in all directions – which significantly helps facilitate construction and therefore housing prices. When compounded with population growth, these physical limitations are likely a substantial portion of the cause of high housing prices.
If we put aside land restrictions, there are still many other factors that lead to high housing prices – the free-market capitalist ownership model, building costs, increasing size and obsession with homes as central to people’s identity and many other factors. This post cannot address all of these complex and intersecting issues, but suffice to say that the solution to the housing crisis is first and foremost: Build homes faster than population growth. Once we accomplish that, we can begin to talk about alternative ownership models and other factors. I will end this post with a few resources that have shaped my thinking on housing.
How Vienna offers affordable housing (see Singapore too!)
Construction Physics Substack
THE GEOGRAPHIC DETERMINANTS OF HOUSING SUPPLY – ALBERT SAIZ 2010, MIT PressPublished on August 8, 2021